If you claim that many areas of the nation have few houses for sale, no one will disagree. (“Rob, when are those big funds that own tens of thousands of rentals going to start selling?” With rents and values going up like they are, don’t hold your breath.) Arguably inventory is at an all-time low. At the end of the fourth quarter, there were 1.48 million existing homes available for sale, which was 10.3% below the 1.65 million homes for sale at the end of the fourth quarter in 2016. On the other hand, based on responses to its Builder Application Survey (BAS), the Mortgage Bankers Association estimates that new home sales will increase dramatically this year.
Jumbo and ARM News
Note that last week’s residential application data showed that with the steeper yield curve, ARMs increased slightly as a percentage of total applications to 6.3% (unit basis).
Mountain West Financial will begin offering the Jumbo A program. This program is available as a 30-year, 15-year, 5/1 Libor ARM, 7/1 Libor ARM or 10/1 Libor ARM option. The Jumbo A programs have replaced the Jumbo II programs on the rate sheet. The Jumbo II programs are still available through BOLT.
CALCAP's "Investor Edge:" CALCAP Lending's 7/1 ARM Program with rates as low as 7.25%. Call (855) 372-0960 for information.
Banc of California announced an Interest Only Qualification. Interest Only loans will qualify over the remaining term after the initial fixed period. For example, a 5/1 ARM will qualify over a 25-year term. A 7/1 ARM will qualify over a 23-year term. (Previously a 20-year qualification term was used.) Guidelines remain at up to 47% DTI (all programs but expanded).
Check out the Wholesale Product and Pricing Bulletin 2018-2 JUMBO GUIDELINES RELEASE for an introduction to FCM's new Non-Conforming Jumbo product offerings.
Effective immediately, the Non-Agency Jumbo Fixed Rate products in Fifth Third Correspondent Lending’s LendingSpace have been separated from the ARM products. The ARM product will continue to offer the Standard, Preferred and Reserve options. The Fixed rate products have been condensed into one streamlined option with less expansive parameters than the ARM offerings. Additionally, the Correspondent Underwriting Guidelines have been updated to include Appendix Q guidance for the Non-Agency Jumbo product.
Effective January 26, improvements were made to the Fannie Mae Homestyle Renovation products. The Fannie Mae Homestyle Renovation High Balance products have had all overlays removed and now are aligned with the conforming loan limit products parameter requirements. This includes offering three and four-unit options on purchases and refinances of a primary residence. Flagstar Bank also introduced 3/1, 5/1, 7/1, and 10/1 adjustable rate products at the conforming loan limits. The adjustable rate products will also be aligned with the fixed rate conforming parameters. For the new ARM products please use the existing agency ARM pricing on page four of the rate sheets along with the Homestyle Renovation -1.000 LLPA found on page two. See Fannie Mae HomeStyle Renovation, Doc. #5719 for the full product description.
Franklin American Mortgage Company has expanded its FHA to allow 1-unit investment properties for Streamline Refinance transactions on the FHA standard products. Investment property Streamlines will remain as not permitted for the FHA Jumbo product. FAMC has also updates its VA guidelines. An AVM/appraisal is no longer required for owner-occupied VA Interest Rate Reduction Refinance loans (IRRRLs), regardless of credit score. The maximum loan amount has been increased to $1,500,000 for all transaction types. Loan amounts greater than $1,000,000 will require a 700 minimum FICO.
Wells Fargo Funding has increased the maximum loan amount for cooperatives (co-ops) on Non-Conforming Loans. Eligible geographic locations remain the same; however, loan amounts now align with the LTV/CLTV matrices in Section 950: Non-Conforming Conventional LTV Matrix.
Events and Training
Mortgage Compliance Magazine is proud to support the Mortgage Compliance Professionals Association of America. MCPAOA Members are eligible for events like the upcoming Free Webinar with Industry Expert Mitch Kider reviewing the CFPB/PHH changes. Sign Up for free to become a member, then register for the webinar! then register for the webinar!
It's time to join your industry colleagues in attending the 2018 Annual GREFPAC Conference on Wednesday, March 7th in Atlanta. Get the latest information on trends and schemes from industry experts that are relevant to you and your business. Leaders from QuestSoft Verification and Audit Services, the FBI, Johnson|Thomas, D.S. Murphy & Associates, DataVerify, CoreLogic, Freddie Mac, Fannie Mae, and the Georgia Department of Banking and Finance will lead discussions on topics such as CyberSecurity, Ethics, Risk Management, and Credit Policy.
MQAC is offering a free webinar on February 22nd on the Implementation of HMDA Rules.
Two fantastic companies unite to bring you one of the most important webinars you'll see this whole year. Insellerate and Sales Boomerang have come together to show you how to automate your loan growth with borrower intelligence. The webinar starts at 10:30am PST / 1:30pm EST on Wednesday the 21st of February. IMPORTANT NOTE: This webinar will not be recorded so if you don't attend you will miss the content.
The Title Report is hosting the Blockchain: Your Questions Answered webinar for anyone who has questions about Blockchain and the real estate transaction. On Feb. 21st Factom, Inc.’s Jason Nadeau and National Association of Realtors Mark Lesswing will discuss how the technology is being used in land title management, where it is being used and what the industry can expect in the future. Get your questions answered by registering today.
MBA’s CRA Residential Lending Workshop is just a few weeks away and there's no better time to learn about the latest on improving or expanding your CRA lending programs. The Federal Reserve recently announced that federal bank regulatory agencies will give favorable CRA consideration to revitalization activities in disaster areas affected by Hurricane Maria. Read more, and then learn more when you join us in Charlotte, North Carolina to have your specific CRA questions answered by the experts.
Down in California, the California MBA is hosting its first Chairman’s Conference. For “C-Level” executives from member companies. To be held April 8-10 in La Jolla, “You’ll be networking with and learning from colleagues in the mortgage industry who face the same challenges you face!”
If you are a mortgage or title agent looking to tap into the largest home buying segment (Millennials) in the US, join The Zillow Consumer Insights for Mortgage Lenders on February 22nd at 2PM EST.
Find out the best and easiest ways to protect yourself from cybercriminals with expert Scott Augenbaum. Don’t become a statistic - attend this webinar on February 27th at 2PM EST and learn how to spot criminals before they strike.
AmeriHome’s underwriting management team will be providing an Appraisal Review Webinar on additional dates this month. The webinar will focus on reviewing appraisals for Fannie Mae and Freddie Mac loans. Tuesday, February 20, 2018 – 11 am Pacific / 2 pm Eastern. Thursday, February 22, 2018 – 1 pm Pacific / 4 pm Eastern. Tuesday, February 27, 2018 – 9 am Pacific / 12 pm Eastern.
The U.S. economy is doing well, which by itself pushes rates higher. Inflation hasn’t been a problem in decades, but yesterday the bond market was reminded that the Federal Reserve might really raise interest rates three or more times this year and several more next year. The Fed has forecast three rate hikes for this year and another three for next year, but economists have been changing their forecasts for this year to include another rate hike. And so the benchmark 10-year yield surged to a 2.92% yield, the highest its been in years. And, as a reminder that it’s not a rule that they move in opposite directions, even as yields moved up the stock market continued to gain.
There is no nice way to put what happened to U.S. Treasuries on Wednesday aside from they were crushed. Bond ignored the weaker-than-expected Retail Sales for January and focused on the Consumer Price Index data that beat expectations with the largest month-over-month change in more than a year. You would think strong CPI data would be welcomed, but all it did was stoke inflation and rate-hike concerns that hurt Treasuries across the entire curve. Elsewhere, Business inventories increased 0.4% in December, while total business sales increased 0.6%, showing that sales growth is outpacing inventory growth. The 2-yr note yield hit its highest level since September 2008 while the 10-yr note yield rose to its highest level since January 2014. The data did help the stock market, which saw the S&P 500 close over a percent up.
Following up on the Fed Trade Operations I mentioned yesterday, and not that 99% of you care, but Class B was the target of today's modest Fed support when the Desk purchased $298mn 15-year conventional 3% and 3.5%. The Fed will turn its attention towards Class C today, when they will purchase up to $710mn GNII 3.5% ($340mn) and 4% ($370mn) during the usual 11:15 to 11:45am time slot.
Today has a heavy economic calendar with the Producer Price Index (+.4%), weekly jobless claims (230k), the NY Fed Manufacturing Index (weakest since July) and the Philadelphia Fed Manufacturing Survey (stronger than expected). That is followed by January industrial production and capacity utilization, and finally, the February NAHB Housing Market Index is out at 10AM ET.
In lesser news, the Treasury will announce the auction sizes for next week's 1-, 3- and 6-month T-bills, will auction $7bn new 30-year TIPS in the afternoon, and the NY Fed will report MBS purchases for the week ending February 14. The 10-year is currently yielding 2.92% and 30-year agency MBS prices are worse .125.
Employment and Promotions
Lakeview has significantly expanded eligibility for its Agency No MI program, increasing the potential to help high LTV borrowers looking for the lowest payment possible. Income limit requirements now include any loan that receives a HomeReady® or Home Possible® "Eligible" message from DU or LPA. The Lakeview Agency No MI program is changing the way originators sell payment, with both purchase and refinance options. As a true Agency No MI Program with LTV's up to 97%, the program helps boost volume, re-engage with agents, and combat the all-to-common "what's your rate?" question from rate shoppers. Contact your Lakeview Correspondent Business Development Director or Wholesale Account Executive to learn more. With the Lakeview Agency No MI Program, It's All About the Payment.
GSF Mortgage Corporation is offering the ability for branch managers and loan originators to build their own tailored brand – making them more appealing to their local communities by adding a personal touch that counters the big box image of mortgage lending. President Chad Jampedro was recently featured in the MPA Power Originator and explained his belief in the power of building a personal brand, especially in smaller markets where it is critical to be “hyper-connected to the community”. If you are interested in a branch opportunity and have the desire to build or maintain your personal brand, please reach out to Chad directly.
In job news, Sierra Pacific Mortgage is looking for talented additions to its teams across the nation. Don't miss the opportunity to work for a company that continues to experience growth, prioritizes its culture and employees and offers hands-on support from our leadership team! We're looking for talented and motivated loan originators throughout the US. Contact us about our opportunities just waiting for you. If you have the vision and the drive, we'll provide the support and tools you need to take your career to a whole new level. Send your resume to firstname.lastname@example.org to learn more. Sierra Pacific Mortgage offers renovation loans, diverse jumbo products, a powerful technology suite and excellent marketing to set you apart. We’ve also been named one of the Top 50 Mortgage Companies to Work For by Mortgage Executive Magazine several years in a row.
Resitrader reports growing interest in its loan trade data. As more volume moves through the platform every month, Resitrader is generating “big data” on loan pricing – not just the winners, but the spreads between investor pricing at the loan level. “We’re seeing a great deal of variation, volatility, and granularity in bids,” says John Ardy of Resitrader. “This is the result of having over 30 investors aggregating agency product through Resitrader, each with their own proprietary pricing models, variables, and inputs.” The upshot is that Resitrader data is a valuable and growing source of actionable intelligence for participants in the secondary market.
Blackstone Group LP elevated Jonathan Gray, who turned the buyout firm into the world's biggest real estate investor, to president and chief operating officer.